US Open: Wall Street bulls take the stage!

• Wall Street opens higher as PCE data reveals lowest inflation in over 2 years
• S&P 500 is up 1.0%, and Nasdaq Composite gains 1.1%
• Headline PCE shows a modest 0.1% increase in May, while year-over-year price increase slows to 3.8%

U.S. stock indexes opened on a positive note as the latest PCE data indicated a decrease in inflation, easing concerns about potential interest rate hikes. The Dow Jones Industrial Average climbed 0.5%, the S&P 500 rose 0.8%, and the Nasdaq Composite saw a gain of 1.1%. 

The PCE deflator, the Federal Reserve's favored inflation gauge, slowed to 3.8% in May, accompanied by stagnant consumer spending, indicating a potential loss of momentum in the economy. The core PCE reading also softened to 4.6%, while services inflation, excluding housing and energy services, experienced a welcome deceleration. These figures led to increased futures gains and the reversal of losses in benchmark Treasuries, as market speculation suggested reduced pressure on the Fed for multiple interest rate hikes by the end of 2023. 

On the other hand, in the euro-area, core inflation accelerated in June, posing a setback for the European Central Bank (ECB) and potentially strengthening its determination to raise interest rates next month. The measure of underlying consumer-price gains rose to 5.4%, while headline inflation reached 5.5%, both slightly higher compared to the previous month.

US500 index, currently trading at 4490 points, has shown a significant 1.2% increase today. It recently experienced a bounce from the support level at 4400, indicating a potential shift in momentum. As the index approaches the 4500 level, it is important to monitor its ability to break through this resistance. A successful break of 4500 could potentially pave the way for further gains towards the next level at 4550.

The top movers for the SPX index (US500) today are Carnival Corp (+5.77%), SolarEdge (+3.56%), and Nvidia (+2.83%)., source Bloomberg

Company News:

• Carnival (CCL.US) shares advance 7.1% after the cruise line operator was upgraded to buy from hold at Jefferies, which highlighted the positive effects of CEO Josh Weinstein’s tenure so far. The broker also raises their price target on the stock to a Street high.
• Nike (NKE.US) shares decline 1.1% after the sportswear firm posted less-than-expected fourth-quarter earnings per share and a disappointing outlook. Its sales beat forecasts, however, and analysts highlighted Nike’s better-than-anticipated performance in China as a bright spot.
• Dominion Energy (D.US) drops 0.4% after the utility cut its operating earnings per share guidance for the second quarter, missing the average analyst estimate.
• Accolade (ACCD.US) gains 4.8% after the healthcare software firm provided a better-than-expected outlook for second-quarter revenue. Analysts noted the encouraging tone of the results overall, with SVB Securities seeing the numbers as a “solid execution proof point” of the company’s path to profitability